East Devon District Council looks set to to join other South West authorities in investing in a new bank

A newly set-up local bank could be ‘extremely beneficial’ for Budleigh Salterton, according to a former mayor.

East Devon District Council (EDDC) looks set to join South Hams and West Devon councils in setting up a local bank, currently known as South West Mutual, which would be owned by its members.

South Hams and West Devon council have agreed already to invest £50,000 to help support the formation of the bank, and on Wednesday, February 13 East Devon District Council’s cabinet agreed to recommend the council invest in the bank.

Councillor Alan Dent, a former mayor of Budleigh, told members Budleigh recently lost its last bank when Lloyds closed its doors in January and the two mobile banks suffer with ‘constant queues’.

He said: “The service provided to rural communities sounds extremely beneficial, irrespective of what happens with businesses.”

Current Budleigh mayor cllr Tom Wright said: “The bank will guarantee a bank account for everyone. It won’t give loan or credit but will give them a bank account, and some people for whatever reason cannot get a bank account.”

Simon Davey, EDDC’s strategic lead for finance, told councillors there was a risk that there will be no financial return and the entire initial investment could be lost if the plan to launch the mutual is unsuccessful. But he said despite the risk the council proposed to ringfence £49,995.

“This will help make banking more local, provide branch facilities in rural locations, recycle the savings of local people and businesses back into the regional economy, promote financial inclusion and improve access to credit for small and medium sized business.”

Chief executive Mark Williams described the project as ‘extremely high risk’ but said the ‘social and environmental benefits justify the risk’.

Tony Greenham, founding director of South West Mutual, previously said the regional bank would run seven staffed and 21 satellite branches.

Concerns were raised by Cllr Steve Gazzard, who said: “We are investing £50,000 but there is risk you may not get any of it. In the realms of the budget, it is not a lot of money, but to people outside, it is a huge amount.”